Hunter Laboratories of Campbell, CA and its chief executive Chris Reidel filed a whistleblower suit against Laboratory Corp of America Holdings (LabCorp) and Quest Diagnostics alleging the two giants gouged Medicaid system by billing the state system significantly higher amounts than they bill private insurers. Originally filed in State court in December 2007, the case was removed to federal court and unsealed in August 2013 (Hunter Laboratories LLC v. Quest Diagnostics et al 13 -cv-01129, U.S. District Court, Eastern District of Virginia (Alexandria)). According to Bloomberg News, “A similar case brought by Hunter and Riedel accusing Quest of overcharging Medi-Cal, the Medicaid program in the state of California, was settled in 2011 for $241 million.” A similar case is pending against LabCorp and Quest in Georgia.
Click here to read the full Bloomberg News article: Quest Diagnostics Sued for Defrauding Virginia Medicaid
On September 11, 2013, FierceMedicalDevices reported that “While the Virginia case is likely alarming to other state payers, the feds have long been concerned that Medicare is being bilked by diagnostics companies. According to an Inspector General report released over the summer, the likes of Quest and LabCorp overcharged Medicare by about $910 million for common lab tests in 2011, as private insurers paid between 18% and 30% less than the federal government.”
Click here to read the full article: Quest, LabCorp Defrauded Medicaid, Lawsuit Says
LabCorp is also being sued in San Francisco Superior Court (No. CGC-12-518072) to prevent LabCorp for improperly changing screening codes on laboratory orders resulting in higher payments by consumers. While preventative screening laboratory work is generally free of charge under many health care plans, LabCorp’s actions of changing the codes results in consumers being responsible for co-payments and charges, which are then pursued by LabCorp.